[영상M] Illegal Advertising “Low Interest Rates” … Thousands of People in the Era of High Interest Rates “Debt Bomb”

In December last year, police investigators broke into a multi-family house in Chang-dong, Seoul.

When I opened the two safes in the bedroom, a bundle of money and dozens of paper bags came out.

The envelope contained dozens of “low-interest exchange loan agreements” written by men and women between the ages of 30 and 50.

[서울 마포경찰서 경찰관 대화]

“I’ll get everything out of here.”

The owner of the safe is a 33-year-old man who describes himself as a ‘consulting firm operator’.

Only the business registration was “consulting”, but he was actually caught doing illegal lending business.

Primarily, he addressed small business owners in difficult financial conditions, saying, “I’ll give you a low-interest loan,” and then engaged in unregistered “usury business”.

The interest earned by the illegal man lending company reached 2,000 percent at an annual interest rate.

Over 2,300 victims in the past three years have been deceived by men.

The company’s profits reached a whopping 18 billion won.

“Low Interest Loan” and “Usual Lending Business” are completely opposite concepts.

But how did they connect the two concepts and use them in crime?

If you log into social media, you will often see misunderstanding loan ads with official social service names like “Sun Salon” and “Loan for the Commonwealth”.

It is a method of using the modified government Taegeuk model or intelligently designing advertisements such as a broadcast company’s news screen.

Consequently, there are many misunderstandings such as advertisements from places with public credibility.

They set up ① a PR firm dedicated to these SNS ads and ② a (self-proclaimed) consultancy firm dedicated to illegal high-interest loans.

They advertised “I will convert high interest loans into low interest loans” and attracted loan applicants.

It is said that a large number of small business owners who are in urgent need of energy due to the trade restrictions of Corona 19, etc., but have blocked the money lines.

Applicants with low credit scores often struggled with high interest rates.

The illegal lending business group said, “I’ll lend you the funds to pay off your existing debt, so if you pay off the debt and your credit score goes up, you can get a new low-interest loan right then.”

This method is called ‘loan transfer’.

The problem is that the interest rates on their loans are beyond imagination.

In a short period of time to pay off high-interest loans, improve your credit score, and switch to low-interest loans, about 15% of the principal was taken as interest.

There have also been victims who got a 15% discount in a fortnight, reaching 2,000% at an annual interest rate.

According to current legislation, if you want to start a loan business, you must register with the municipality that has jurisdiction and not request an interest rate equal to or greater than 20% per year, which is the maximum legal interest rate.

They are subject to punishment because their own foreign currency lending business is unregistered and illegal.

Some of you who have read this far may think so.

“If I take some money and swap it into a low-interest loan, wouldn’t it still be beneficial to me?”

Most of the victims also fell in love with these help lines and borrowed money from these companies.

The problem is that the principal of loans to victims suddenly increases to around 15%.

Furthermore, with the loan term being longer than the original one, the burden of the recent rise in interest rates has increased, increasing the number of victims.

Consider the case of a 37-year-old woman who owes 58 million won to a loan company.

In order to switch to a soft loan, we paid interest of 8.7 million won to the entrepreneurs in two months, and in the meantime, the loan principal has increased significantly.

This woman was originally repaying 1.1 million won in principal and interest each month.

Now, I’m paying 1 million won a month in interest only minus the principal.

Again, if the extension is rejected, the capital must be repaid immediately.

Seoul Mapo Police Station arrested and investigated a 33-year-old man who ran an illegal usury company and handed her over to prosecution.

Additionally, 14 people, including employees who helped with the crime by providing loan counseling and clerical assistants, will be booked without detention and handed over to prosecution.

Police also froze 3.6 billion won demanding additional compensation for vehicles, bonds, real estate and criminal funds from three high-ranking executives, including the man arrested.

It is the largest private finance case since the police were allowed to freeze criminal proceeds.

Police urged newcomers and small business owners to be especially careful, saying that if such a loan is misused, the principal amount of the loan increases and the interest burden increases, which could lead to another vicious cycle of lending.

(Video provided by Seoul Mapo Police Station)